This moderate increase in gross domestic product (GDP) of the second economy in the euro zone is greater than the forecast of the National Institute of French Statistics, which anticipated growth of 0.2 % after + 0.1 % in the first quarter.
Resist American strokes
“This is really good news: 0.3 %, that means that since the beginning of the year, we have growth slightly greater than 0.5 %,” said the French Minister of the Economy, Éric Lombard, on RTL radio, recalling that the government was targeting 0.7 % for the set of 2025.
This “shows well, while customs duties were already applied, that (companies) resist this situation,” he said.
President Donald Trump had established in April a customs surcharge of 10 %, in addition to the average of 4.8 % of rights that previously applied to the majority of products imported from the EU. The agreement concluded Sunday evening between Washington and the European Union provides for a general rate of 15 % from August 1, with exceptions. In France, this decision strongly worries.
Growth with friable bases
It is therefore a good surprise for the French economy, even if the composition of this growth is considered disturbing.
As at the beginning of the year, it is stocks, that is to say the goods produced but not yet sold at the end of a given period, which pulled it in the second quarter with a positive contribution of 0.5 points. In this case: aeronautical and automobile equipment. An increase in stocks may mean that a boom in demand is made in anticipation. But that can also mean that the manufactured products have not found takers.
“It remains a growth that rests on very fragile bases. The domestic demand is almost zero and the production is too dynamic compared to domestic and external demand, ”said Maxime Darmet, senior economist at Allianz Trade.
In fact, the final domestic demand outside stocks has stagnated. A traditional pillar of growth, household consumption has slightly rebounded, 0.1 % after a decline of 0.3 % in the first quarter, driven by increased consumption of food products. Despite this slight recovery, households, however, remain little about expenditure from the pandemic and very wait -and -see in a heckled environment. They prefer to fuel their woolen stockings: the savings rate reached 18.8 % at the start of the year, the Record outside the COVID period.
Investments have sunk in the red (-0.3 % after -0.1 %), especially among companies.
Threatening budget and orders at half mast
A large factor of uncertainty concerns the 2026 budget, the main guidelines of which were available on July 15 by the French Prime Minister François Bayrou, with the aim of reducing France’s public deficit by 5.4 % to 4.6 % of GDP, the largest in the euro zone. The measures provide for an effort of 43.8 billion euros, including a freeze on social benefits, pensions and budgetary expenses (excluding defense).
The contribution of foreign trade to growth has remained negative, -0.2 point, the slight rebound in exports having been counterbalanced by an acceleration of imports.
For 2025, INSEE tables a growth of 0.6 %, significantly less than in 2024 (1.1 %). According to Éric Lombard, who receives on Wednesday at the ministry the economic sectors assigned by the trade agreement, he will have a “measured” impact on the French economy.
But Maxime Darmet says “to fear that the situation is complicated in the second half” because “new orders in the manufacturing sector are very low”.
France is getting better than two other European heavy goods vehicles, Germany (first European economy) and Italy, whose GDP fell 0.1 % in the second quarter. Contrely, Spain has a strong dynamism (+ 0.7 %). Throughout the euro area, GDP growth reached 0.1 % in the second quarter.